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Internship Report on Foreign Exchange Operations at Janata Bank 2016 - Md Imran
Transcript of Internship Report on Foreign Exchange Operations at Janata Bank 2016 - Md Imran
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Internship Report
On
Overall Performance Evaluation of Foreign Exchange Operations : A Study On
Janata an! "td
Supervised by
#uhammad Shahidullah $asfi%
Assistant Professor& 'epartment of #anagement Studies
Jagannath (niversity& 'ha!a
Submitted By
#d) Imran
Roll : *++,-,-,./
Section : A& atch : 0th
Session : -,++*-,+-
'epartment of #anagement Studies
Jagannath (niversity& 'ha!a
Date of Submission: February 22, 2016
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Letter of Transmittal
#uhammad Shahidullah $asfi%Assistant Professor
'epartment of #anagement Studies
Jagannath (niversity& 'ha!a
SUB!"T: Su1mission of Internship Report on Overall Performance
Evaluation of Foreign Exchange Operations
'ear Sir
2ith due respect that& I am delighted to su1mit my Internship report on Overall Performance Evaluation of
Foreign Exchange Operation of Janata an! "td) 3hich is prepared 1y me) $his report gives me a vast
experience and valua1le !no3ledge of ho3 to analy4e Foreign Exchange Operations) $his report has 1een
giving me the practical implement of a theoretical !no3ledge) I had tried my 1est to collect information on
this report)
Finally& I 3ould li!e to than! you for your valua1le guidance and supportive in preparing this report) I
3ould 1e grateful for any clarification 3hen re%uired) I 3ill 1e highly o1liged if you are !ind enough
to approve this report and provide your valua1le 5udgment on it)
Sincerely your
66666666666666
#') Imran
I': *++,-,-,./
Section : A
atch : 0th
'epartment Of #anagement Studies
Jagannath (niversity& 'ha!a
Student#s De$laration
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I do hereby solemnly declare that the report entitled “Overall PerformanceEvaluation of Foreign Exchange Operations : A Study On anata !an" #td$
embodies the results of my o%n e&ort after completion of '( days %or" at anata !an" #td)* perused under the supervisor of +r) +uhammad Shahidullah ,as-.* Assistant professor* /epartment of +anagement Studies* agannath0niversity* /ha"a
I also con-rm that* this report is only prepared for my academic re.uirementnot for any other purpose) It has not been previously submitted to any otheruniversity1college1organi2ation for an academic.uali-cation1certi-cate1diploma or degree)
I further a3rm that the %or" reported in this internship is original and no parthas been previously submitted to any boo"s or in any other universities)
666666666666666666
#') Imran
I': *++,-,-,./
Section : A
atch : 0th
'epartment Of #anagement Studies
Jagannath (niversity& 'ha!a
"!%T&F&"'T! (F SU)!%*&S(%
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$his is to certify that #d) Imran is student of A program& I' 7o: *++,-,-,./& has
successfully completed his 8Internship Program9 entitled 8Overall Performance Evaluation of
Foreign Exchange Operations : A Study On Janata an! "td9 under my supervision as a partial fulfillment of
the a3ard of A degree)
e has done his 5o1 according to my supervision and guidance) e has tried his 1est to do thi
s
successfully) I thin! this program 3ill help him in the future to 1uild up his finer career)
I 3ish his success and prosperity)
Signature
66666666666666666
#uhammad Shahidullah $asfi%
Internship Supervisor
Assistant Professor
'epartment of #anagement Studies
Jagannath (niversity& 'ha!a
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'$+noled-ement
At 1eginning I 3ill start my report 1y sho3ing respect and give praise to our almighty Allah 3ho
ta!es care a1out me to finished report successfully
I give than!s to our honora1le teacher #uhammad Shahidullah $asfi%& Assistant professor& 'epartment of
#anagement Studies of Jagannath (niversity 3ho gives me such a attractive prospect to ma!e a report on
8Foreign Exchange operations9 as 3ell as helped me in every step to accomplish my report and try to provide
me a faire practical !no3ledge as should as it possi1le)
I also 3ill not miser to respect J" that give me chance to o1tain practical !no3ledge through their
internship program) I than! the 1ranch manager #d) Anisur Rahman ;han 3ho helped me to do internship
in his
1ranch and provide me a fear idea a1out practical !no3ledge of 1an!ing activities) I 3ill sho3
appreciation to other an! employees 3hose taught me as 3ell as suggested me to do 3or!)
Finally& I 3ould li!e to than! authors of the 1oo!s that I have ta!en help from& 3hich had made my
understanding clear during the ma!ing of the report)
i
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!.e$utive Summary
#ain o15ective of this report is to analy4e the performance of foreign exchange operation of Jana
ta
an! "td) $his is descriptive in nature that has 1een administrated 1y collecting secondary
data)
Source of data 3ere collected from annual report of J" and reading material pu1lished 1y J" et
c)
for analy4ing data #)S Office and #)S Excel soft3are 3ere used)
$his report has 1een sho3n that trend of export import and remittance increases year 1y year 1ut
in
-,++ and -,+<
the gro3th rate of export and import got lo3est due to 3orld recession and inflationary
pressure respectively) Remittance flo3s
are greatly affected in -,+-) Operating profit has
str
ong
positive relation 3ith export and import 3ith significant level lo3er than ),.remittance also has stron
g
positive relation 1ut significant level higher than ),.) In total national mar!et share of export& impo
rt
and remittance& J"
contri1ute 3ith the proportion at += and 0= for export& impor
t
and
remittance respectively) uge amount of remittance come from (AE 3here most of anglad
eshi
expatriate lives and almost
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promote Remittance& In case of "B opening& an! should provide lo3 margin facility to cli
ents)
#ore Import and export item can 1e included J" can provide onsulting facility 1y an exp
ertgroup of officials for foreign exchange& In case of payment of remittance& they should introdu
ce
de1it card so that customer can 3ithdra3 money 3ithin a second at any3here
ii
Table
of
Contents
Part Particulars Page No
!.e$utive Summaryii
Part one Introduction 1/
10 &ntrodu$tion 2
11 (ri-in of te %eport 2
12 Si-nifi$an$e of te %eport 2
13 (b4e$tives of te report 3
131 Broad ob4e$tive 3
132 Spe$ifi$ (b4e$tives 3
1 5etodolo-y of Te report 3
11 %esear$ desi-n 3
12 Sour$es of Data "olle$tion 3
13 Data "olle$tion )ro$edure
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1 Data 'nalysis and %eportin-
1 Literature %evie
16 Limitations 6
Part Two (r-ani7ational )rofile 8/1020 'n (ver *ie of anata Ban+ LTD 9
21 "orporate &nformation 9
22*ission of anata Ban+ 9
23 5ission of anata Ban+ 9
2 "ore *alue of anata Ban+
2 Business )rospe$t of anata Ban+
26 Five ;ear Finan$ial )erforman$e 10
Part Three Forei-n !.$an-e (perations 11/32
31 &mport 13
32 !.port 21
33 %emittan$e 28
)art Four )erforman$e 'nalysis 33/0
0 Trend analysis 3
11 &mport Finan$e: 3
12 !.port Finan$in-: 3 13 Forei-n %emittan$e: 36
2 &n$ome From Forei-n Trade
38
21 &mport !arnin- 38
22 !.port !arnin- 39
23 %emittan$e !arnin-s 3
2 "omparison of &mport,!.port and %emittan$e !arnin-s
0
Part Five Findings,Conclusion & Recommendation
1/3
1 Findin-s 2
2 "on$losion 3
3 %e$ommendation
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List of 'bbreviation
BL anata Ban+ Limited
'D 'utori7ed DillerT&FT So$iety for orld/ide &ntra/Ban+ Finan$ial Tele$ommuni$ation!%" !.port %e-istration Form""&?! "ief "ontroller of &mport ? !.portU") Uniform "ustoms ? )ra$ti$e&%" &mport %e-istration "ertifi$ate
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10 &ntrodu$tion of Te %eport
+
10 &ntrodu$tion of Te %eport
For any 1usiness school student only curriculum activity is not enough for handling the real usiness
situation& there for it is an opportunity for the students to !no3 a1out the field of 1usiness through t
he
internship program) $his report is prepared on the purpose to 1etter understand a1out fo
reign
exchange operation in perspective of 5anata 1an!) 7o3 a day?s international 1usiness has 1ecome ver y
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5ustified as the crucial re%uirement of four years A graduation)
4
13 (b4e$tives of te %eport
O15ective is an important thing for different purpose) O15ective helps to go in a good 3ay that relat
es
3ith the Report) Primary o15ective is to learn the real 3orld experience 1ecause I have gat
hered
theoretical
!no3ledge of A program and try to match real 3orld experience 3ith the theoretic
al
!no3ledge
131 Broad (b4e$tive
$he 1road o15ective of
this report is to analy4e the Performance Foreign exchange operation
s of
Janata an! "td) CJ"D
132 Spe$ifi$ (b4e$tives
Furthermore& the specific o15ectives of this report are:*
$o !no3 the import& export financing procedure through J")
$o analy4e the trend of import and export financing through J")
$o examine the division 3ise import and export financing and remittance)
$o analy4e the earnings from foreign exchange division of J")
$o sho3 the relationship export& import and foreign remittance 3ith profita1ility of Ja
nata
an! "td)
Assessment of
the J"?s import& Export& foreign Remittance 3ith total
national Im
port&
Export& foreign Remittance
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1 5etodolo-y of te %eport
11 %esear$ desi-n:
$his report is descriptive
in nature 3hich 1riefly reveals analy4e the foreign exchange operation
of
Janata an! "imited) It has 1een administered 1y collecting secondary data)
12 Sour$es of Data "olle$tion:
#ainly this report 1ased on secondary sources of data) I also used some primary data to ma!e
the
report more rich and informative5
Primary Source:
$a!e expert opinion from higher officials of the 1an!)
O1servation 3ith during the internship program)
Secondary Sources:
$he secondary data sources are follo3ing*
Annual Report of J"C-,+,*-,+
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For analysis and interpretation of data some
statistical tools li!e #S*2ord and #S*Excel
soft3are 3ere used
<
16 Literature %evie
$rade& also called goods exchange economy& is to transfer the o3nership of goods from one
person or entity to another 1y getting something in exchange from the 1uyer) $rade issometimes loosely called commerce or financial transaction or 1arter) A net3or! that allo3s
trade is called a mar!et) $he original form of trade 3as 1arter& the direct exchange of goods
and services) "ater one side of the 1arter 3ere the metals& precious metals Cpoles coinsD& 1ill&
paper money) #odern traders instead generally negotiate through a medium of exchange&
such as money) As a result& 1uying can 1e separated from selling& or earning) $he invention
of money Cand later credit& paper money and non*physical moneyD greatly simplified and
promoted trade) $rade 1et3een t3o traders is called 1ilateral trade& 3hile trade 1et3een
more than t3o traders is called multilateral trade)
"iterature Revie3 has vital relevance 3ith any research 3or! due to literature revie3 the
possi1ility of repetition of study can 1e eliminated and another dimension can 1e selected for
the study) $he literature revie3 helps researcher have 1een conducted to analy4e the Foreign
Exchange operation of an!s in angladesh and a1road) ut there are very fe3 research and
literature availa1le on the su15ect related to Foreign Exchange operation an!s)
angladesh launched a deep and 3ide*ranging trade reform strategy in the early +,s) $his
included su1stantial reduction and rationali4ation of tariffs& removal of %uantitative
restrictions& move from multiple to a unified exchange rate system& converti1le current
account and an overall out3ard orientation of trade policy regime) As a result& the country?s
trade integration& measured 1y the trade*@'P ratio& rose from +>= in +, to )
$he ang!o! Agreement 3as esta1lished in +0.) #em1er countries are angladesh& India&Sri "an!a& hina& the Repu1lic of ;orea and "ao People?s 'emocratic Repu1lic) $he
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ang!o! Agreement has recently 1een revised and renamed as the Asia Pacific $rade
Agreement CAP$AD) $he AP$A has come into force from + July -,,/) $he AP$A contains
consolidated list of tariff concessions granted 1y mem1er countries to each other) (nder this
agreement& hina has provided +,,= tariff concessions to > items of angladesh at >*digit
level and Repu1lic of ;orea has provided +,,= tariff concessions to + items at +,*digitlevel)
$he I#S$E Frame3or! Agreement 3as signed in June +0 and Agreement on F$A
concluded in Fe1ruary -,,
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/
Part $3o
Organi4ational Profile
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0
20 'n overvie of anata Ban+ Limited ABL
Janata an! "imited is the leading sector 1an! in angladesh offering full range of Per
sonal&
orporate& International $rade& Foreign Exchange and "ease Finance) Janata an! "imited is
the
preferred choice in 1an!ing for friendly and personali4ed services& cutting edge technology& tailore
d
solutions for 1usiness needs& glo1al reach in trade and commerce and high yield on investm
ents&
assuring Excellence in an!ing Services)
-)+ orporate Information:
Came: Janata an! "imited
%e-istered 'ddress: Janata ha1an& ++,& #oti5hil commercial area'ha!a*+,,,& angladesh
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Le-al Status: Pu1lic "imited ompany
Date of &n$orporation as )L": #ay -+& -,,0
'utori7ed "apital: $!) ,&,,, million Cas on +)+-)+-)
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Of J"
'ignity Accounta1ility
Integrity
-). usiness Prospect of the an!
#aintaining re%uired capital ade%uacy
usiness expansion in capital mar!et
@radual expansion of 1ranch net3or!
Progressive automation of the 1ranches
Real online 1an!ing soft3are 3ill 1e in function soon
Expansion of A$# and credit card
4)6 Five 7ear 8omparative Financial and Operational Performance:
9, in +illions;
Particular 4
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Deposits 286567 361677 409464 478535
516010
Loans and
Advanes 44(>54 4(>?
5=@>>5
!nvest"ent (>(=' @
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+,
Part $hree
Foreign Exchange
Operations
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h
e
!
a
n
"
,
h
e
Im
p
o
r
t
e
,
h
e
E
x
p
o
r
t
e
r
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In J" A' ranch CsD there are a lot of talented officials are 3or!ing continuously 3ith great effo
rt&
s!ill and team3or! are performed in this department) $he angladesh an! and the respecte
d in
charge CsD of this section control them)
In
exercise
of
the po3er
conferred 1y
section
of
the Foreign
Exchange Regulation
Act&
++& no person can impo
rt
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goods into angladesh unless he is registered 3ith the hief ontroller of Import and Expo
rt or
exempted from the provisions of the said order) So the follo3ing documents are re%uired t
o 1e
su1mitted to the licensing authority for registration as importers:
uestionnaire form duly filled in and signed
Income tax registration certificate
$rade "icense from the #unicipal or "ocal Authority
an! certificate
7ationality certificate
Partnership 'eed 3here applica1le
ertificate of Registration 3ith the Registrar of Joint Stoc! ompanies&
ertificate from the ham1er of ommerceBRegistered $rade Association
O3nership documents or rent receipts of the place of 1usiness
Any other documents re%uired under the relevant import policy)
+
312 &mport pro$edure:
$o import through Janata an! "td a customer re%uires:
)erforma &nvoi$e is re$eived by te L=" appli$ant
L=" appli$ant submit it to te Ban+
Ban+ &ssue L=" to te appli$ant favorin benefi$iary
L=" advised by advisin- Ban+
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oods sipped by Benefi$iary ? submit te do$uments to
ne-otiate ban+
Ce-otiate ban+ forard te do$uments to te
L=" issuin- ban+
Do$uments $e$+ed by L=" issuin- ban+ ? inform it to L="
appli$ant
&f do$uments are o+, ten L=" value is paid by L="
issuin- ban+ to ne-otiate ban+
oods release from te $ustoms
Submission of Bill of !ntry to L=" issuin- Ban+ by te
appliant
%eport to Ban-lades Ban+
='
313 &mport )oli$y (rder:
(nder the import policy and export control act& +.,& the government of angladesh formulate
s the import policy through #inistry of ommerce) As pe the import policy goods and
commodities are divided into four groups
"ist of items 1anned for import
"ist of items import of 3hich is su15ect to certain condition
Foot 7ote: $his list contains further conditions 3ith regard to import of items on
1anned list
and conditional list
Freely importa1le item: All items excepting those mentioned in the 1anned
list
and conditional list are freely importa1le)
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31 Steps in an &mport Letter of "redit Transa$tion
ST!) 1: Te Sales "ontra$t
$he sales contract is the formal agreement 1et3een the 1uyer and seller specifying the terms o
f sale that 1oth parties have agreed upon) $he contract should include: a
description of the goodsH the
amountH
the unit
priceH the terms
of
deliveryH
the time allo3ed for
shipment and present
ation of documentsH the currencyH and the method of payment
2 'ppli$ation ? '-reement:
1 &mport L=" ALetter of "redit:
A letter of credit is a conditional an! underta!ing of payment) In other 3ords letters of credit is a
letter from the importer an!ers to the exporter that the 1ills if dra3n as per terms cond
itions
complied 3ith 3ill 1e honored on presentation) As per (P' .,, a credit may 1e either:
iD Revoca1le)
iiD Irrevoca1le)
$he redit& therefore& should clearly indicate 3hether it is revoca1le or irrevoca1le) In the a1sence or
such indication the credit shall 1e deemed to 1e irrevoca1le)
+.
2 )arties of Do$umentary "redit AL":
+) ApplicantB uyerBImporter
-)
IssuingBOpening an!
) Advising an!
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Figure: Parties of 'ocumentary redit
3 Types of L=":
"ommer$ial Letters of "redit
ommercial letters of credit are mainly used as a primary payment tool in international trade such as
exporting and importing transactions) #a5ority of commercial letters of credit are issued su15ect to th
e
latest version of (P C(niform ustoms and Practice for 'ocumentary reditsD) $he I pu1lishe
s
(P& 3hich are the set of rules that governs the commercial letters of credit procedures)
Standby Letters of "redit
ommercial letters of credit are a means of payment to 1e utili4ed 3hen the principal perfor
m its
duties) As an example& let us consider an exporter 3ho ships the goods according to the sales contr
act
and apply to the nominated 1an! for the payment) If the nominated 1an! decides that the presentati
on
is conforming to the terms and conditions of the credit and the (P rules then exporter 3ill 1e pa
id)$his situation is 5ust contrary in stand1y letters of credit) A payment is made to the 1eneficiary of
a
stand1y letter of credit 3hen there is a 1reach of the principalKs o1ligation)
%evo$able Letters of "redit
Revoca1le letters of credit give issuer the amendment or cancellation right of the credit any
time
3ithout prior notice to the 1eneficiary) Since revoca1le letters of credit do not provide any protectio
nto the 1eneficiary& they are not used fre%uently) In addition& (P /,, has no reference to revoca1
le
letters of credit)
All
credits issued su15ect to
(P
/,,
are irrevoca1le
unless
other3ise
a
greed
1et3een the parties)
&rrevo$able Letters of "redit
Irrevoca1le "etters of redit cannot 1e amended or cancelled 3ithout the agreement of the c
redit
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parties) (nconfirmed irrevoca1le letters of credit cannot 1e modified 3ithout the 3ritten consent
of
+/
1oth the issuing 1an! and the 1eneficiary) onfirmed irrevoca1le letters of credit need also confirmin
g
1an!Ks 3ritten consent in order any modification or cancellation to 1e effective)
Lo$al or Ba$+ to Ba$+ L=":
ac! *to *1ac! "B means one credit 1ac!s another) It is ne3 credit in favor of another 1eneficiary)
Sometimes 1eneficiary seller of a credit himself is una1le to supply goods specified in the "B a
nd
re%uired to purchase from another supplier 1y opening second credit) esides& the formalities
and
re%uirements for C"B openingD the follo3ing formalities and documents are also re%uired for openin
g
1ac!*to*1ac! "B)
For opening "B the client is
to su1mit to the 1an! an application in the printed format
of
thedesignated 1an!) $his is called "B application form 3hich is also an agreement 1et3een the import
er
and the 1an!) $he form is to 1e stamped under stamp Act) in force in angladesh) $he importer m
ust
su1mit the "A I#P and indent or contract) Purchase orderBpro*forma invoice Cduly accepted
1y
the importerD along 3ith "B application)
Application for opening of "B duly signed 1y the importer& #em1ership certificate from ham1er
of
commerce or any other recogni4ed 1usiness association& Galid IR&$I7 certificate& $hree copies o
f
declaration stating that that income tax for previous year has 1een paid or income tax return has 1e
en
su1mitted& $rade license &Gat registration certificate& Galid indentBpro forma invoice& Insurance cover
note 3ith money receipt& Any other permit if re%uired as per instruction issued 1y I E time
to
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time under present IPO)
Te L=" appli$ation must be $ompleted= filled in and si-ned by te autori7e person of te
importer -ivin- te folloin- parti$ulars:
Full name and address of the supplier of 1eneficiary and importer& 1rief description of the goods& "B
value for (SL& etc) CFR valueD 3hich must not exceed the "A value& the unit price& %uantity %ual
ity
of the goods& Origin of the goods& port of loading and port of destination must 1e mentioned& #odel
of
shipment
CSea& Air& $ruc!
or
Rail
etc)D&"ist
date of
shipment
and negotiation time Cmust
no
t
1e
1eyond , days from the shipment dateD&Insurance cover note num1er and name or the comp
any&
$enor of draft C+)e& sightB issuanceB deferred etc& #ode of advising "B Ci)e) airmailB full telex sho
rt
ca1le etc)D&Opening of "B under (P' pu1lication 7o) .,,B* I revision +& 2h
ether
shipmentB transshipment is allo3ed& Instruction to add confirmation if re%uired& "A 7um1er& An
y
other relevant information and instruction if any must 1e mentioned in the "B application form)
A
3ritten application from opener is verified a relevant licenseB "AB permit of the loanB arter mu
st
+0
remain valid up to that period the extension is sought) Increase of "B amount may 1e done provid
ed
the "A covers the increase in amount) "B amount can 1e decreased provided the relevant Indent
is
amending accordingly and 3ith the consent of 1eneficiary) Each of clauses of the "B can 1e amend
ed
provided the parties involve the "B consent to it procedure or preparation and dispatch) Amendme
nt
is to 1e typed in the an!s printed format) $he copies of the amendment
must
1e dispatched to
all
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Benefi$iary
Fi-ure: $ypes of "B form
+>
Step6: 'dvisin-:
$he advising 1an! for3ards the letter of redit to the 1eneficiary CsellerD stating that no commitme
nt
is conveyed on its part) o3ever& if the advising 1an! has 1een as!ed to confirm the letter of re
dit
and agrees to do so& it 3ill incorporate a clause underta!ing to honor the 1eneficiary?s drafts& provid
ed
the documents evidence that all terms and conditions of the letter of redit have 1een complied 3ith
)
Step 8: 'ddin- "onfirmation
$he confirming 1an! does the confirmation) onfirming 1an! is a 1an!& 3hich adds its confirmatio
n
to the credit and it is done at the re%uest of the issuing 1an!) $he confirming 1an!& #ay or #ay
not
advising usually& does not do it if there is not a prior arrangement
3ith the issuing 1an!) y 1ei
ng
involved as a confirming agent& the advising 1an! underta!es to negotiate 1eneficiary?s 1ill 3itho
ut
recourse to him)
Before $onfirmin-, it as to observe folloin-s/
"B is issued and there is a re%uest to add confirmation
Revie3 the "B terms
Provide reim1ursement
'rafts to 1e dra3n on "B opening 1an!
Availa1ility of credit facilities
"ine allocation from the 1usiness and o3nership units in the importer?s country
onfirm and advise "B
Step9: 'mendments of letter of $redit
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After issuance and advising of a "B& it may 1e felt necessary to delete& add or alter some o
f the
clauses of the clauses of
the credit) All these modification are communicated to the 1enefi
ciary
through
the
same
advising
1an!
of
the
credit)
All
these
modifications
are
communicated
t
o
the
1eneficiary through the same advising 1an! of the credit) Such modifications to a credit are termed
as
amendment to a letter of credit) $here may 1e some of the conditions in a credit are not accepta1le
1y
the 1eneficiary) In that case& 1eneficiary contact applicant and re%uest for amendment of the clauses)
Te issuin- ban+ as to be done te folloin-s E
O1tain 3ritten application from the applicant of the credit duly singed
and
verified 1y 1an!)
onfirm that& in case of increase of value& application for amendment is to
1e
supported 1y revised indentBpro*forma invoice
evidencing consent
of
the
+
1eneficiaryH
Ensure& in case of extension of shipment period& that relative "A is
validB
revalidatedB increased up to the period of proposed extension)
onfirm that amendment of insurance cover note also 1e su1mitted in case
of
1oth credit amount and shipment period extension amendment)
#aintain proper recoding and filing of amendmentsH
Recover charges for amendment Cif on account of applicantD and pass necessar
y
voucher)
Te folloin- $lause of L=" and in$rease=de$rease of uality of -oods/
IncreaseB decrease value of "B and IncreaseBdecrease of %uality of goods)
Extension of shipmentBnegotiated period)
$erms of delivery& i)e) FO& FR& IF etc)
#ode of shipment
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Inspection clause
7ame and address of the supplier
7ame of the reim1ursing
7ame of shipping etc
Step: )resentation of Do$ument
$he seller is 1eing satisfied 3ith the term and condition of the credit ma!e shipment of the goods
as
per "B) After ma!ing the shipment of the goods in favor of the importer to exporter su1mit
s the
documents to the negotiating 1an!
After receiving all document& the negotiating 1an! then chec! the documents against the credit) If th
e
documents are found in order& the 1an! 3ill pay& accept& or negotiate to J") ranch and 1an! recei
ve
seal to 1e affixed on the for3arding schedule) $he 1ill
of
exchange and transport
documents
must
immediately 1e crossed to protect loss or fraudulent J" chec!s the document the usual document ar
e
Invoice
ill of lading
7on*negotia1le copy of 1ill of lading
ertificate of origin
Pac!ing list
Shipping Advice
eneficiary certificate
ill of Exchange
Pre*shipment inspection report 4<
Shipment certificate)
Step 10: Settlement of letter of $redit
Settlement means fulfillment of issuing 1an! in regard to affecting payment su15ect to satisfying th
e
credit terms) Settlement may 1e done under three separate arrangements as stipulated I the credit)
Step 11:
Settlement by payment:
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ere the seller presents the documents to the nominated 1an! and the 1an! scrutini4es the documents)
If satisfied& the nominated 1an! ma!es payment to the 1eneficiary and in case& this 1an! is other th
an
the
issuing
1an!&
it
sends
the
documents
to
the
issuing
1an!
and
claim
reim1ursement
a
s par
arrangement)
Step12: Settlement by '$$eptan$e:
Settlement
in this
arrangement& the seller
su1mits
the documents
evidencing the shipment
to
the
accepting 1an! Cnominated 1y the issuing 1an! for acceptanceD accompanied 1y draft do3n on t
he
1an! at the specified tenor)
Step 13: Settlement by ne-otiation:
$his settlement procedure stars 3ith the su1mission of documents 1y the seller to the negotia
tion
restricted 1y the issuing 1an!& only nominated 1an! can negotiate the documents) A
factor
scrutini4ing that the documents meet the credit re%uirement& the 1an! may negotiate the document
s
and give value to the 1eneficiary) $he negotiating 1an! then sends the documents to the issuing 1an
!)
As usual& reim1ursement 3ill 1e o1tained in the pre agreed manner)
3,2 #$port
#ainly Export "B is the confirming from the an! that& if the importer fails to ma!e payment to t
he
exporter& then the 1an! 3ill pay the exporter on 1ehalf of the importer) $he exporter can lien the "
B
to 1an! and can get the payment 1efore the "B expire date)
321 !.port L=":
"B 3hich is received to exportBsale of goods from one country to another country or one place
to
another place 3ithin a countryD is !no3n as export "B) it may 1e received from any 1an! of foreign
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country& local 1an!& another 1ranch of the same local 1an! or received 1y the export des! from t
he
import des! of the same 1an!) Exporters are allo3ed to export the commodity under irrevoca1le lett
er
of credit) (nder this type of export& exporter 3ill ship the goods as pr terms of the credit and 3ill
get
payment as per arrangement of the credit
-+
Fi-ure: < Export "B process
322 (btainin- !.port %e-istration "ertifi$ate C!%"D:
7o exporter is allo3ed to export any commodity for export from angladesh unless he is registere
d3ith hief
ontroller of Imports and Exports CI
ED
and holds valid Export Regist
ration
ertificate CERD) After applying to the IE in the prescri1ed from along 3ith the neces
sary
papers& concerned offices of the hief ontroller of Imports and Exports issues ER) Once registere
d&
exporters are to ma!e rene3al of ER every year)
323 Se$urin- !.port (rder
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After getting the ER the exporter may proceed to secure the export
order) e can do t
his 1y
contacting the 1uyers directly or through agent) In this purpose exporter
can get
help from "iai
son
office& uyer?s local agent& Export promotion& Organi4ation& angladesh mission a1road& ham1er o
f
commerce Clocal and foreignD, $rade fair etc)
32 (btainin- !@) Form:
After having the registration& the exporter applies to Janata an! "imited 3ith the trade license& ER
and the ertificate from the concerned @overnment Organi4ation to get EMP) If the 1an! is satisfie
d&
an EMP is issued to the exporter)
32 Si-nin- of te $ontra$t:After
communicating 3ith 1uyer the
exporter
has
to get contracted
for
exporting exporta1le
ite
ms
--
from angladesh detailing commodity& %uantity& price& shipment& insurance and mar!& inspecti
on&
ar1itration etc)
326 %e$eivin- Letter of "redit
After ma!ing contact 3ith foreign 1uyers and reaching on agreed price and terms& conditions
the
exporters receive "etter of redit)
328 )ro$urin- te materials:
After ma!ing the deal and on having the "B opened in his favor& the next step for the exporter is
to
set a1out the tas! of procuring or manufacturing the contracted merchandise)
329 !ndorsement on !@):
efore the exporter 3ith the customs or postal authorities lodges the export forms& they should get
all
the copies endorsed 1y Janata an! "imited) efore shipment& exporter su1mits EMP) form
3ith
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commercial invoice) $hen Janata an!?s respective officers chec! it properly& if satisfied& certifie th
e
EMP) 2ithout EMP exporter cannot ma!e shipment) $he customer must declare all export goods o
n
the EMP issued 1y the authori4ed dealers
32 Disposal of !.port pro$edure
Original:
ustoms authority
reports first copy
of EMP to angladesh an! after shipme
nt of
the goods)
Duplicate: 7egotiating 1an! reports the 'uplicate to angladesh an! in or after negotiation date 1u
tnot later than +
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Shipping instructions
Insurance policy)
3211 )resentation of e.port do$uments for ne-otiation:
After shipment& exporter su1mits the follo3ing documents to Janata 1an! "imited for negotiation)
ill of Exchange or 'raft
ill of "ading
Invoice
Insurance PolicyBertificate
ertificate of origin
Inspection ertificate
onsular Invoice
Pac!ing "ist
uality ontrol ertificate
@)S)P) certificate
Photo
3212 !.amination
of Do$ument:
an!s
deal
3ith documents
only& not
3ith commodity) As the negotiating 1an! is givin
g the
value 1efore repatriation of the export proceeds
it is
advisa1le to scrutini4e and examine
each
and every document 3ith great care 3hether any discrepancyCsD is o1served in the docum
ents)
$he 1an!ers are to ascertain that the documents are strictly as per the terms of "B efore negotiati
on
of the export 1ill) an! officers assigned for examining the export documents may use a chec!list f
or
their convenience)
3213 Ce-otiation of e.port do$uments: 7egotiation stands for payment of value to the exporter against the documents stipulated in the "N
)
If
documents
are in order& Janata an!
"imited
purchases
CnegotiatesD the same on the 1as
is
of
-<
-1an!er* customer relationship) $his is !no3n as Foreign 'ocumentary ill Purchase CF'PD)If t
he
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1an! is not satisfied 3ith the documents su1mitted to Janata an! "imited and gives the exp
orter
reasona1le time to remove the discrepancies or sends the documents to "B opening 1an
! for
collection) $his is !no3n as Foreign 'ocumentary ill for ollection CF'D)
321 Settlement of Lo$al Bills:
$he settlement of local 1ills is done in the follo3ing 3ays& *
• $he customer su1mits the "B to Janata an! "imited along 3ith the documents to negotiate
• Janata an! "imited officials scrutini4e the documents to ensure the conformity 3ith
the
terms and conditions)
• $he documents are then for3arded to the "B opening 1an!)
• $he "B issuing 1an!s gives the acceptance and for3ards an acceptance letter)
• Payment is given to the customer on either 1y collection 1asis or 1y purchasing the
document)
321 5odes of )ayment
$he most common methods of payment under a "B are as follo3s:
Pa/"ent "ethods
under LC
*i&ht or Pa/"ent redit De-erred Pa/"ent Credit
Aeptane Credit +e&otiation Credit
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Fi-ure: 5odes of )ayment
4(
Si-t or )ayment $redit
2hen
the
credit
stipulates that
drafts
C1ill
of
exchangeD
should
1e
dra3n
under
it
on
'P
terms
involving
payment
to
the 1eneficiary
on
presentation
of documents& it
is !no3n
as a 8Sig
ht or
Payment redit9) In this credit the issuing 1an! nominates a 1an! in the exporter?s country as
the
paying 1an!) If the paying 1an! accepts its nomination& its position is that of an agent of the issui
ng 1an!) 2hen the documents under the credit are presenter to it& it pays the 1eneficiary provided all t
he
terms and conditions of credit have 1een complied 3ith) It gets reim1ursement from the issuing 1a
n!
for the amount paid)
Deferred )ayment "redit
$he term 8'eferred9 means postponed to a future period or date) 2hen a credit does not re%uire the
payment to the 1eneficiary immediately on presentation of the documents 1ut after a specified perio
d
has elapsed& it is !no3n as 8'eferred Payment redit9) According to this type of credit& the payme
nt
is hot made in full on the tender of documents 1ut 1y installments at pre*determined future d
ates)
'eferred payment credit may 1e used 3here the 1eneficiary 3ishes to allo3 the importer time to pay
for the document)
'$$eptan$e "redit
2hen under the terms of a letter of credit drafts are dra3n on 'A terms involving payment to
the
1eneficiary on the
maturity of
the
accepted ill of
Exchange dra3n
under it& the
letter
or
cre
dit
is
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referred to as an 8Acceptance redit9 or a 8$erm redit9) In this form of credit the 1eneficiary dra
3s
a draft for particular usance Ce)g) ,& /,& , days sight or even longerD& paya1le upon eith
er the
correspondent 1an! or the issuing 1an!)
Ce-otiation "redit
In a negotiation credit the documents are accompanied 1y a sight draft C1ill of exchangeD) $he 1ill
of
exchange may 1e dra3n on the issuing 1an! or the importer or any other 1an! stipulated in the cre
dit)
$he 1an!& 3hich negotiates documents under the credit& purchases the 1ill of exchange and pays t
he
amount to the 1eneficiary 3ho tenders the documents) $he issuing 1an! reim1urses the negotiatin
g
1an!
46
33 %emittan$e
Remittance means sending or transfer money or money*3orth from one place to another $he 3ord
Remittance originates from the 3ord remit 3hich means to transmit moneyB fund) In 1a
n!ing
terminology& the 3or! remittance means transfer
of fund one place to another) 2hen
money
transferred from one country to another is called Foreign Remittance)
Forei-n remittan$e of BL may be $lassified into:
In3ard Foreign Remittance
Out3ard Foreign Remittance
%emittan$e
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In3ard Out3ard
Remittance Remittance
Fi-ure: Types of %emittan$e of BL
331 &nstruments of Forei-n %emittan$e
ash: 'ollar& Pound& France Fr) Riyal or any other currency)
$)): $ravelers he%ue)
F)')': Foreign 'emand 'raft)
F)$)$: Foreign telephonic $ransfer
$)$: $elegraphic $ransfer& a1le transfer or s3ift transfer)
#)$: #ail $ransfer)
I)#)O: International #oney Order)
he%ue: y any person institution)
P)O: Payment Order
')': 'emand 'raft
O)): Out3ard ill ollectionI)): In3ard ill ollection
4>
332 &nard %emittan$e:
In3ard Foreign Remittance #eans Remittance received from foreign countries from a1road) In othe
r
3ords remittance coming into our country from other countries 1y the remitter 1y 3ay of permissi1
le
1an!ing channel through freely converti1le Foreign urrencies is called In3ard Foreign Remittanc
e
i)e) payless point of vie3 it is in3ard foreign remittance) On the other hand remitter?s point of vie3
it
is called out3ard Foreign Remittance)
$3o forms as prescri1ed 1y angladesh an! are used for purchase of Foreign urrencies such as*
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included as out3ard remittance)->
336 %emittan$e "ain:
3361 Step/1 A%emittan$e Sendin- )ro$ess:
Remittance rush to the 1an!Bexchange house nearest to their residence B3or! place)Fill in the application form Cin the case first time remittanceDBsu1mit mem1ership card)
@o to tellers& deposit form and currency)
FDD:
$eller ma!e F''
and over to the remittance for sending the same to the 1eneficiary
Send to 1eneficiary?s 1an! 1ranch through courier)
FTT:
$eller prepare F$$ massages
Send soft copy to their processing unit at head office)
'eliver one copy of the massage to the remitter for remittance)
)ro$essin- and Sendin-:
Processing unit at head office compiles messages
Sends to the dra3ee 1an!s)
3362 Step/2 A%emittan$e %e$eivin- )ro$ess:
FDDs:
'ra3ee 1ranch receive F''s from 1eneficiary or through courier)
#a!e payment of F''s dra3n on the 1ranch
Send F''S for collection that are dra3n on their 1an!sB1ranches)
redit proceeds of F''s upon collection)
Send I'As to head office)
FTTS:
Processing unit at head office processes F$$ massages
Sends $)$s to the 1ranches)
ranches ma!e payment of o3n remittances)
Issue and send payment order to the 1ranches of other 1an!s 1eneficiaries)
Spot "as payment:
ranches receive secret num1er from the 1eneficiary
'o3nload remittance masseges from 3e1 application of concerned institution)
@et an application form filled in 1y the 1eneficiary)
Ensure identity of the 1eneficiary)#a!e cash payment to the 1eneficiary)
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Send I'As to head office) -
338 %emittan$e )rodu$t=Servi$e of BL:
Forei-n %emittan$e
Foreign remittance section of Janata an! "td) is an integral part of Foreign Exchange 'epartmen
t)
And this section of Foreign Exchange 'epartment deals 3ith
In3ard foreign remittance
Out3ard foreign remittance
Opening Foreign urrency Accounts)
@overning 2age Earner?s ond)
Opening Student File etc)
#edical Purpose
Ravels Purpose
&nard Forei-n %emittan$e:
7ormally& In3ard Foreign Remittance comprises all incoming foreign currencies) Remittances issued
1y the correspondent 1an!s situated in the foreign countries and there1y dra3n on Janata an!& a
re
considered to 1e its In3ard Foreign Remittances) Follo3ings are the In3ard Foreign Remittances&
F'' Paya1le
F$$ Paya1le
$ Paya1le
Purchase of foreign currencies)
(utard forei-n %emittan$es:
Remittances issued 1y Janata an! to their foreign correspondents to fulfill their customers? needs ar
e
considered to 1e the Out3ard Foreign Remittances) It comprises the follo3ings:
F'' Issued
F$$ Issued
$ Issued
Endorsement of foreign currencies in the passport)
Sale of foreign currencies)
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Forei-n Demand Draft AFDD &ssued:
People used to send money a1road for various purposes) J" issues most of the F'' for the purpo
se
of payment of the application fees to the foreign universities) For the issuance of F''H $B# Fo
rm
has to 1e filled up duly) $his form is filled up under the Foreign Exchange Regulation Act& +
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3 $hen the customer pays cash or 1y de1iting his account the $raveler?s he%ue is issued)
Endorsement is given on the passport and on the tic!et) ustomer fills up the $B# Form)
Purchased application form has to 1e filled up 1y the purchaser)
6 Entry has to 1e given in the Foreign urrency Register and in the $raveler?s he%ue Regist
er)
Folloin- Do$uments must be retained form te $lients:
Photocopy of passport
$B# form C$ravel #iscellaneousD
Others opy of government order Cin case of government employeeD
opy of invitation letter if issuance is against conferenceBtraining %uota
5=!ndorsement of "as:
ash foreign currency can also 1e remitted through the cash endorsement in the passport) In case
of
endorsing
cash
in
the passport&
the re%uirements are similar to
those of $raveler?s
he%ue)
ut
according
to
the foreign
exchange Regulation
Act&
+
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+) ustomer has to fill up a 8 Form9 if the amount exceeds L-,,,),,) 8 Form9 descri1es
the
purpose of sending the $$)
-) $he dollar amount comes to the ead office of J" through American Express& 7e3 or!)
)
J"& 1ranch sells the dollar to ead Office and collects the money in local currency)
Student File (penin-:
Student can endorse L-,,),, at a time in his o3n name) ut if the amount exceeds L-,,),,& then t
he
student has to open a student file) For opening a student file& the follo3ing documents are re%uired:
Preliminary application and information for admission)
"etter of approval 1y the university of the student)
A filled*in application form for foreign currency in a1road)
$ranscript of Records9 given for the last degree 1y the university)
ertificate given 1y the oard for S)S)) B )S)) or e%uivalent examination)
A photocopy of I*-, form
-
Part Four
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Performance
Analysis of Foreign
Exchange Operations
0 Trend analysis
11 &mport Finan$e:;ear 2010 2011 2012 2013 201
&mport
Finan$eAin
5illion
+-.-. +>0. +>>-><
rot .= ..= 0= *.=
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Sour$e: Annual Report of J" C-,+,*-,+
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rot +=
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7ear -,+, -,++ -,+- -,+ -,+<
emittanc
e 9in
+illion t";
45924 56190 52640 72285 100089
Dro%th 25 22 6 37 38
Sour$e: Annual Report of J" C-,+,*-,+
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21
&mport !arnin-
and
)ortion
of
&mport earnin-s
on
Total
Forei-n
T
rade
!arnin-s:
;ear -,+, -,++ -,+- -,+ -,+<
Total !arnin-
from Forei-n
Trade
->.-)
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22 !.port !arnin- ? )ortion of !.port &n$ome on Total Forei-n Trade !arnin-s:
;ear 2010 2011 2012 26013 201
Total
!arnin-s
from Forei-nTrade
->.-)
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>
23 %emittan$e !arnin-s and )ortion of %emittan$e on Total ain of Forei-nTrade in$ome :/ ear 2010 2011 2012 2013 2014
:otal
#arnin&
-ro"
%orei&n
:rade
4?(4)@ 5'=>)6@ '
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E
2 "omparison of &mport, !.port and %emittan$e !arnin-s:
Proportion o- #$port
!no"e
Proportion o- !no"e Proportion o-
'e"ittane !no"e
39 '4 4 4=
38 '@ =4
39 '' =>
37 '5 4
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Fi-ure: +
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$he earning from import& export financing and foreign remittance has gradually increased)
As
import volume is higher than export and remittance so proportion of import earning
also
larger than export and remittance
Relationship of export and import has a strong positive relation 3ith operating profit and
has
a significant level lo3er then ),.) Remittance has also strong positive relation 3ith operatin
g
profit 1ut significant level larger than ),. 1ecause of lo3er remittance volume)
#ar!et
share of
export& Import& and Remittance
are gradually increasing year 1y ye
ar
in
compare 3ith the total national
export& import& and remittance) It
has
seen that hi
ghest
percentage of mar!et share is captured 1y export is +
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I
hope Janata an! "td 3ill do more 3or! for socio*economic development 1esides their 1an!ing
1usiness) $o !eep pace 3ith ever*changing uncertain domestic 1usiness environment and face
the
challenges of revised glo1al economic scenario& the 1an! should 1e more
pro*active and responsive
to introduce ne3 mar!eting strategy to hold the strong position in home and a1road)
For the future planning and the successful operation in its prime goal in this current competitive
environment I hope this report can provide a good guideline) I 3ish continuous success and healt
hy
1usiness portfolio of Janata an! "imited)
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$he export and import financing of J" has increased over the years) J" can develop
attractive
financing
pac!ages
such
as
Pre*Shipment
and Post*Shipment Finance&
Ex port
@uarantee facility etc at a la3 rate for exporters and importers to maintain and increase the
trend of its import and export 1usiness)
J" should increase strong net3or! 3ith the Overseas Exchange ompanies and an!s
in
different parts of the 3orld to ensure 1etter remittance services for its customers and online
an!ing in every 1ranch to promote Remittance
ighest portion of
export& import executed 1y client through J" is in 'ha!a division and
remittance in hittagong division) an! should concentrate more on other division also
to
increase its export& import and remittance client in this case they can increase num1e
r of
corporate 1ranches in other division)
In case of "B opening& an! should provide lo3 margin facility to clients)
#ore Import and export item can 1e included
Interest could 1e provide at concession rate on export& and import finance to customers
J"
can
provide
onsulting
facility
1y
an
expert
group
of
officials
for
f
oreign
exchange
In case of payment of remittance& they should introduce de1it card so that customer can
3ithdra3 money 3ithin a second at any3here)
I 1elieve these steps 3ill 1e helpful to improve the performance of Janata an! "imited an
d the
financial sector of angladesh)
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8/18/2019 Internship Report on Foreign Exchange Operations at Janata Bank 2016 - Md Imran
63/64
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8/18/2019 Internship Report on Foreign Exchange Operations at Janata Bank 2016 - Md Imran
64/64